CBA scores credit card deal with GE Capital
The Commonwealth Bank’s extensive branch network and business card track record has won it a lucrative contract with global financial services provider GE Capital. The deal, which may have gained CBA more than 100 new corporate clients, will allow it to become a significant player in the corporate credit card market.
The new corporate clients, Australian subsidiaries of GE Capital’s British and United States clients, will be issued Mastercards and be provided with card facilities, processing and risk management. CBA already has 50,000 corporate cards on issue and the services provided under this deal have the potential to add around $100 million to the bank’s receivables book.
Mr Nick Kennett, head of CBA cards, says service to the corporate credit card market is one of information and providing information back to the client. With all such services being predominantly fee-based, a particularly lucrative area of the market is corporate travel and entertainment. Purchasing cards and small business credit cards also come under the corporate banner.
To turn a profit in the increasingly crowded personal credit card market, issuers rely upon volume and risk management. Greater product flexibility as evidenced by the launch of AMP’s 4.95% p.a. Introductory Balance Transfer Credit Card is also increasing competitive pressures.
No doubt CBA will be more than happy with its recent decision to focus attention on its corporate business. Although ANZ has long claimed status as Australia’s largest card issuer, on closer inspection it is running neck and neck with CBA at around 2.8 million cards on issue.